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TAX RATES > Dominican Republic Tax Rates

 

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dominican-republic-tax-rate

DOMINICAN REPUBLIC tax rateS

dominican-republic-tax

Dominican Republic
Income Tax Rate

Dominican Republic
Corporate Tax Rate

Dominican Republic
Sales Tax / VAT Rate

25%

25%

16%

DominicaN REPUBLIC Income Tax Rates

Dominican Republic tax rates for individuals are progressive, between 15% - 25%.

Taxable Income (DOP)       /      Tax Rate %

Up to DOP 316,017                         0%
DOP 316,017.01 - 474,024             15%
DOP 474,024.01 - 658,367             20%
Over DOP 658,367.01                    25%


Income from an independent profession, business income, income from employment, immovable property, pension income, capital gains, investment income, profits from gambling and betting and also income from land are subject to Dominican Republic tax.

If an individual stays in the country more than 182 days in a tax year, then he/she is subject to Dominican Republic income tax, which are due March 15 of the tax year. Married individuals have to file their taxes separately.

Income which is taxable in Dominican Republic is profits from all activities, all other earnings including capital gains, without looking at their source. Residents pay income tax on foreign source income.
 

Taxation of Capital Gains

Capital gains of Dominican Republic individuals has to be added to the gross income which will then be taxed at progressive tax rates.
 

Allowable Tax Deductions

Dominican Republic residents are allowed to deduct all expenses which are believed to obtain or maintain the income which is subject to income tax.


 

DominicaN REPUBLIC Corporate Tax Rate

Corporate tax rate in Dominican Republic is 25%.

Corporate tax is applied to net income of the businesses from various sources, including capital gains from the transfer of business assets. Investment income gained by corporate taxpayers who are resident in the country are also subject to Dominican tax, if the income is from foreign sources. Dividends, bank savings, loan interest, gains from financial operations or banking, capital company shares, exchange bills, bonds, and other securities or movable capital are also tax in Dominican Republic.

Branch Corporations or resident companies are subject to Dominica corporate tax only from income resulted from the activities in the country.
 

Capital Gains Taxation

Capital gains are treated as ordinary income and are taxed at 25% corporate tax rate. Gains of qualified holding companies, realized by disposing of shares, are not subject to tax.
 

Withholding Tax on Dividends

Dividends are subject to a 25% withholding tax in Dominican Republic
 

Withholding Tax on Royalties

Royalties which are paid to nonresidents are subject to a 25% withholding tax in Dominican Republic. Royalties paid by a resident entity to its head office abroad are also subject to a 25% withholding tax, as this royalty payment is considered as a payment to a separate entity.
 

Withholding Tax on Interest

If paid to nonresidents, interest payments in Dominican Republic are subject to 25% withholding tax. One exception is that interest payments made to financial institutions abroad are subject to a reduced tax of 10%. Certain loans which are paid to the government of Dominican Republic are exempt from tax.
 

Capital Duties

1% capital duty is levied to the amount of capital, when forming a company.
 

Tax Year

Tax year is the calendar year, but businesses may choose a closing period by the end of March, June or September.
 

Fringe Benefits Tax

There is no fringe benefits tax in the Dominican Republic.
 

Alternative Minimum Tax

There are no alternative taxes in Dominican Republic.
 

Tax on Real Property

Because it appears in a companies financial statements, immovable property are subject to a 1% asset tax.
 

Tax Penalties

Late tax filing, tax avoidance, or not filing taxes at all, are subject to tax penalty.
 

Dominican Republic Free Zone

Dominican Republic Free Zone offers some advantages to those who wants to start a business by providing reduced or zero tax rates. One advantage is that the Dominican Republic is geographically close to United States, and the country also has trade agreements with both the European Union and the United States. What this means is that an exporter exporting goods from the Dominican Republic Free Zone pays reduced taxes on customs, or doesn't pay any tax at all.

For those who wants to start a business in the Free Zone, some tax exemptions exist up to 15 years: Exemption from corporate taxes, the value added tax, transfer taxes, capital gains taxes, business and incorporation taxes, export duties and exemption from municipal taxes. This 15 year tax exemption period is also renewable.

Another tax advantage is that import duties are also waived for any vehicle, production equipment or material that are needed to carry on business activities for companies in the Free Zone.


 

DominicaN REPUBLIC SALES TAX / Value Added Tax RateS (VAT)

The standard rate of Value Added Tax in Dominican Republic is 16%.

Value Added Tax is levied on the supply of goods and services, with the exception of some products sold in supermarkets. VAT registration is compulsory as a taxpayer. Filing of the Value Added Tax is needed each month.

 

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Related resources about taxation can be found on these web sites:  IRS  |  Deloitte  |  KPMG  |  Doing Business  |  PricewaterhouseCoopers  |  Ernst & Young  | OECD

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